TREASURY

Double Taxation Conventions

David Gauke: A new Double Taxation Convention with the Federal Democratic Republic of Ethiopia was signed on 9 June 2011. The text of the convention has been deposited in the Libraries of both Houses and made available on the HM Revenue and Customs website. The text will be scheduled to a draft Order of Council and laid before the House of Commons in due course.

ENVIRONMENT FOOD AND RURAL AFFAIRS

Dry Weather Conditions

Caroline Spelman: The House will be aware that the current dry spell has created one of the driest springs on record. Indeed it has been the driest spring across England and Wales since 1990 and the driest spring on record in south-east and central southern England. Today, the Environment Agency has announced a move to drought status for Lincolnshire, Cambridgeshire, parts of Bedfordshire and Northamptonshire and western Norfolk, triggered by river and ground water levels, and risk to the environment and to farmers. Most of the south-east (except an area covering central and northern London) is at risk of drought.
	Some reservoir levels are below normal for the time of year and ground water levels are in decline as we expect at this time of year. But it is our rivers that are seeing the greatest impact. The majority of rivers across south-west, central and eastern England have below average river flows with some experiencing exceptionally low flows.
	These low flows are impacting on farmers that rely on spray irrigation during dry spells in the growing season to water their crops. Water for spraying is abstracted from our rivers under licence and conditions attached to those licences have meant that some farmers have had to stop taking water for irrigation. In addition, a small number of notices have been issued to prevent abstraction for irrigation to protect the Romney Marsh site of special scientific interest.
	I have been monitoring developments closely and held a drought summit last month with the farmers, water companies and environmental groups, to hear first hand the impacts on different sectors and to agree actions that could be taken. The Environment Agency
	will report back later this month on the situation and potential impacts on water supplies, farmers and the environment. Natural England is also meeting conservation groups on 14 June and will report back to me on actions to reduce the impact on wildlife. A further meeting is taking place today with representatives of farming, water and energy companies and environmental groups to consider actions that can be taken in the short-term to make their water go further and to look at actions to build resilience in the future. I shall convene a further drought summit later this month to review progress and consider what further actions we may need to take.
	We are working closely with farmers, growers and their organisations as they monitor the situation. Wherever possible, the Environment Agency is working with farmers to encourage voluntary restrictions on water use before imposing formal restrictions on spray irrigation. More widely, the agency has worked with water companies and water users to develop plans that minimise the risk of short-term restrictions on water use.
	For those areas that have moved to drought status, the Environment Agency is working with water companies to remind people and businesses to use water wisely. Natural England has issued guidance to farmers and is ensuring that appropriate environmental stewardship derogations are made available to farmers in agri-environmental scheme agreements as a result of drought-related conditions.
	Most water companies are reporting that they have sufficient reserves and do not predict the need for restrictions on use. Just one, Severn Trent, has informed its customers that restrictions may become necessary should the dry weather continue. Water companies have statutory drought plans that set out how they will manage the impacts of a drought. These plans include early triggers to bring all available water sources into supply before restrictions are imposed on the public water supply. Should there be a need to conserve water for the public supply then water companies may impose temporary restrictions on certain non-essential uses of water to help reduce the likelihood of more stringent demand restrictions that impact on customers and businesses.
	Householders can get good advice on how to make best use of water from their water supplier, and from Waterwise (www.waterwise.org.uk). Water companies are increasing their engagement in this respect.
	The “Natural Environment” White Paper, published on 7 June, announced our intention to reform the water abstraction management regime to provide clearer signals to drive investment decisions to meet water needs and protect ecosystems. The “Water” White Paper, due to be published in December, will provide further details.
	I will continue to monitor the situation and will keep the House updated if there is any material change in the situation.

E. coli

Caroline Spelman: The Secretary of State for Health informed the House on 7 June of how the Government are taking all possible measures to monitor the serious E. coli 0104 outbreak that is centred
	in Germany and to assess and deal with any associated risks should any arise for consumers in the UK. I will not repeat what he has said in relation to the background of the outbreak.
	It is deeply regrettable that this outbreak has resulted in the loss of life. It has also had a disruptive economic impact on growers and others within the supply chain for fruit and vegetables across the EU, including our domestic industry.
	At retail level, prices for domestically produced salad—lettuce, tomatoes, cucumbers, sweet peppers and courgettes—have remained relatively stable, although demand has declined, with the result that more produce is being sent to the wholesale market, which is experiencing movement in prices. I welcome the support for UK producers shown by the big retailers who have in some cases increased their offering of UK salad produce, in response to consumer demand for our home crops.
	One impact of the decision by the Russian Federation to impose a ban on EU fruit and vegetable produce is that surplus produce has been directed to alternative EU markets, including our own. The consequence has been to depress values in the wholesale market, with volumes down, although here again, I understand that prices for English produce are faring better than those for imported produce. But the situation continues to develop and the latest indications from our trade organisations are that the market has deteriorated.
	The impacts of the overall situation are being felt across the EU and because of this, the Agriculture and Fisheries Council on 7 June discussed the need for exceptional measures to address the market situation and to provide financial support for growers affected. Proposals were discussed by Ministers at Council level and considered by officials at the EU Fruit and Vegetables Management Committee but no package has yet been agreed for implementation. Discussions will continue on 14 June.
	The proposals build upon existing measures that are available within the fruit and vegetable aspects of the common agricultural policy via its Single Common Market Organisation (sCMO) of agricultural markets. No brand new measures are proposed. The total budget proposed would be €210 million, which would come from the existing European Agriculture Guarantee Fund (Common Agricultural Policy) budget to cover tomatoes, cucumbers, lettuce and also peppers and courgettes. No additional funding is proposed. The proposals cover the extension and relation of the rules covering market withdrawals. In the main this means that produce will go for destruction, because the perishable nature of fresh produce means that intervention is not a viable option. Compensation would be paid only in respect of the withdrawal of produce and it would not extend to compensation for loss of earnings nor to pay for the difference between current and normal expected market value. Details of the proposal are as follows:
	Separate maximum compensation rates at €/100kg would be established for tomatoes, lettuce, cucumbers, peppers and courgettes, to represent about 50% of the usual average June price for such produce.
	The measures would be open to all member states to implement.
	The allocated funding would be available on a first-come first-served basis—there are currently no plans for an allocation per member state.
	In general withdrawals of produce must be made via Producer Organisations (POs) recognised under the sCMO. There is already such provision through POs’ existing funding programmes but the proposed new funding will be additional. However, under amended proposals, the Commission are considering an alternative route via the Paying Agency direct, which would be helpful for growers who are not members of a PO.
	The proposal is for a temporary measure, to apply retrospectively from 26 May to 30 June, or when the budget is exhausted—whichever is sooner.
	At a later stage, the Commission will consider whether a promotional campaign for fruit and vegetables could also be considered, to support the restoration of consumer confidence in the market.
	The Department for Environment, Food and Rural Affairs will continue to maintain close contact with the Food Standards Agency and with industry organisations and is discussing with the Rural Payments Agency and other Government Departments how to implement the proposed measures.

WORK AND PENSIONS

Work Programme Launch

Chris Grayling: I am delighted to announce that the Department for Work and Pensions is launching the Work programme today. The Government’s vision of a high-quality, personalised employment programme for those benefit claimants throughout Great Britain who need more intensive support is now a reality.
	The Work and Pensions Select Committee report published last month was very positive about DWP’s management of the procurement process despite the “very ambitious timescales” set. Thirty-eight of the 40 contracts have now been signed. The two remaining contracts are all on track to be signed—week commencing 13 June 2011.
	Today, I will be personally visiting a provider in west London to meet their first participants and see first hand how they are starting to use the freedom we have given them to innovate and design personally and locally tailored support.
	The Government will publish providers’ minimum service offers to all claimants in due course. This will ensure that claimants are aware what they can expect, and that providers live up to what they have told us they will deliver. We will also be publishing the details of the local voluntary, public and private sector organisations that make up the prime providers’ supply chains.
	Unlike in previous employment programmes, the Government have adopted genuinely long-term goals in the design of the Work programme.
	Providers will be in place for up to seven years, giving them time to invest in building strong relationships with local partners and to innovate to find what works, enabling them to deliver the best quality back to work support possible.
	Claimants will join the programme for up to two years, so providers will have a real chance to address the most serious disadvantages some of our claimants face in the labour market.
	Once claimants have found a job we will pay providers to help them keep it for up to 18 months for mainstream jobseekers, and up to 27 months for an employment and support allowance claimant moving from incapacity benefits.
	I am confident we have given the Work programme every chance of making a real difference to long-term
	worklessness. We expect to see substantial indications of the success of the programme from spring 2013. A full independent evaluation has been commissioned for that year as the first customers complete their two years and I look forward to sharing the results with the House as soon as possible.